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Medium-term forecast of European economic sustainable growth using Markov chains

Author

Listed:
  • Alina-Petronela Haller

    (Romanian Academy Branch of Ia?i – “Gh. Zane” Institute for Economic and Social Research, Codrescu Str, No. 2, 700481, Iasi, Romania)

  • Ovidiu Gherasim

    (Romanian Academy Branch of Ia?i – “Gh. Zane” Institute for Economic and Social Research, Codrescu Str, No. 2, 700481, Iasi, Romania)

  • Mariana B?lan

    (Institute for Economic Forecasting – NIER, Romanian Academy, Casa Academiei, Calea 13 Septembrie No.13, 050711, Bucharest, Romania)

  • Carmen Uzl?u

    (Institute for Economic Forecasting – NIER, Romanian Academy, Casa Academiei, Calea 13 Septembrie No.13, 050711, Bucharest, Romania)

Abstract

Economic growth is a frequently analyzed aspect, both from theoretical and empirical standpoint, under the impact of the influence factors, while the issue of economic growth was studied by applying different methods and obtaining different results. In the case of EU28, the problem of economic convergence has to take into consideration the fact that the Member States are heterogeneous in terms of development and rate of growth. In the present paper, by using Markov chains we have made, a forecast of the GDP per capita evolution for the economies of the EU28 members, starting from the known time horizon – 1997-2016 as to approach a forecast horizon – 2017-2028. The results obtained show that the convergence process will be a slow one in the case of some Member States, especially in the Central and Eastern Europe. The future economic dynamics will intensify growth divergences, especially in the case of the European periphery, which will suffer minor modifications; the states with the most significant gaps will remain Bulgaria and Romania.

Suggested Citation

  • Alina-Petronela Haller & Ovidiu Gherasim & Mariana B?lan & Carmen Uzl?u, 2020. "Medium-term forecast of European economic sustainable growth using Markov chains," Zbornik radova Ekonomskog fakulteta u Rijeci/Proceedings of Rijeka Faculty of Economics, University of Rijeka, Faculty of Economics and Business, vol. 38(2), pages 585-618.
    • Handle: RePEc:rfe:zbefri:v:38:y:2020:i:2:p:585-618
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    References listed on IDEAS

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    More about this item

    Keywords

    economic growth; Markov chains; medium-term forecast; convergence; EU28;
    All these keywords.

    JEL classification:

    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • N10 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - General, International, or Comparative
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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